Governor Corzine Announces $38 Million in Federal Tax Credit Assistance for Low Income Housing Development

Funds to help spur economic development & create 642 housing units

TRENTON, NJ – July 21, 2009 – (RealEstateRama) — Governor Jon S. Corzine today announced the award of $16,165,287 in federal Low Income Housing Tax Credit funds and $22,634,105 million in American Recovery and Reinvestment (ARRA) funding through the Tax Credit Assistance Program (TCAP). Administered by the Department of Community Affairs (DCA) and the Housing Mortgage Finance Agency (HMFA), this funding will spur the creation of 642 new housing units throughout the state. “The award of these tax credits will make the construction of housing projects possible in several more communities across the state,” Governor Corzine said.   “These projects will not only boost the local economy, more importantly, they will be providing affordable housing for hundreds of New Jersey families.”

Coupled with the $40 million award announced in May of this year, the tax credit program has now funded over 1,500 units of affordable, high quality, rental opportunities for New Jersey residents.  The current $38 million will generate almost $110 million in private investment equity.

Low Income Housing Tax Credit Funds encourage public-private partnerships in the development of affordable housing.  Under the program, affordable housing developersare awarded housing credits to sell to private investors in order to raise capital.  The dollar for dollar tax credit is claimable by investors annually for 10 years. 

“Governor Corzine was among the first in the nation to recognize to move on shovel ready projects, which in turn would create jobs here in New Jersey,” said Commissioner Doria.  “These funds will not only create jobs but also help us reach our goal of providing much needed housing for New Jersey families.”

Prior to the national financial crisis, a single Low Income Housing Tax Credit typically sold for $.80 to $.90 per tax credit dollar.  The private capital received from these sales decreases the amount of debt or loans needed to cover the costs of constructing an affordable housing project.  As a result, rents for tenants can be reduced to more affordable levels since less income is necessary to operate the development.  Since the financial crisis began, the price of Low Income Housing Tax Credits has plummeted, leaving many affordable housing projects suspended. The American Recovery and Reinvestment Act (ARRA) provides Tax Credit Assistance Program (TCAP) funding in order to fill that gap and will enable affordable housing developments to resume.  The HMFA will administer both the LIHTC and TCAP awards and monitor funding to ensure it is spent correctly.

Under federal guidelines, projects eligible to receive TCAP assistance are rental housing projects that received or will receive an award of LIHTCs during the period from October 1, 2006 to September 30, 2009 (federal fiscal years 2007, 2008 or 2009), and require additional funding to be completed and placed into service.

“The LIHTC program is widely credited to be the most successful federal housing program in history,” said Marge DellaVecchia.  “Since its inception in New Jersey, the program has led to the creation of over 25,000 rental housing opportunities for the residents of this state and judging from the units created this year alone, the tax credit program continues to play a positive role in our state’s economic development.”

Since 1967, the HMFA has been committed to making quality housing available at costs affordable to New Jersey residents.  Aside from first-time homebuyers, the HMFA works with senior citizens in senior and assisted living facilities, the disabled in special needs communities, and the state’s most needy families in traditional affordable housing developments.

List of Round Two LIHTC & TCAP Recipients

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For More Information:
Robert Corrales
Phone: 609-777-2600